Auto Insurance Coverage

April 2, 2013

Weatherford insurance lawyers need to know the coverages in an auto insurance policy. As for damage to the auto itself, the terms of coverage for damage to the auto are fairly straightforward:
1. "Named-Peril" coverage is provided on "covered autos." The policy would provide that the carrier will pay for "direct and accidental loss to your covered auto." The coverage is divided into "collision" coverage and "coverage other than collision."
2. The "other than collision" coverage insures against more causes of loss than collision coverage. When both collision coverage and "other" peril coverage are purchased, then the insured is said to have "comprehensive" coverage.
Different deductibles can be applied to the different coverages. For relevant information about auto deductibles, see Texas Insurance Code, Section 542.201 through 542.205.
"Collision" is defined in most policies as "the upset, or collision with another object, of your covered auto." In 1984, the Amarillo Court of Appeals found that a three-inch depression in a road, which caused damage to a trailer fell under the definition of "collision."
"Other than collision" usually encompasses 10 named perils which include:
1. missiles or flying objects,
2. fire,
3. theft or larceny,
4. explosion or earthquake,
5. hail, water or flood,
6. malicious mischief or vandalism,
7. riot or civil commotion,
8. windstorm,
9. contact with bird or animals,
10. breakage of glass.
Policies do not usually define "accidental loss"; however, Texas courts have held that it is a loss that does not ordinarily follow and cannot reasonably be anticipated from the producing act -- that is, one that the actor did not intend to produce.
Here are a few examples:
In a 1997, Austin Court of Appeals case, when an insured made a good faith purchase of a stolen vehicle and insured it, only to have the police confiscate it and return it to its true owner, such an act is not the natural and probable result of the insured's good faith purchase. Accordingly, the loss of the vehicle was "accidental." Even though the insured intentionally purchased the vehicle, the ensuing confiscation by the police was unexpected, unanticipated, and unintentional on the insured's part. The court went on to say that a stolen vehicle, newly acquired by an insured was a "covered auto" even if the insured did not have good title. The insured had an insurable interest that was enough to make it a covered auto.
A 1955, Fort Worth Court of Appeals case said that an auto upset by a strong gust of wind while being driven on a public road was an accidental loss.
In contrast to the above, a 1983, Amarillo Court of Appeals said an intentional act such as an insured's intentionally ramming his car into another car is not an accidental loss, notwithstanding the insured's testimony that this act was done to prevent the occupant of another vehicle from shooting someone else.